Big increase in ‘good EPC’ buy to let mortgage borrowing

One of the biggest lenders in the rental space - Paragon Bank - recorded a 19 per cent increase in buy to let lending during the first half of its financial year.

It lent a total of £1.02 billion, the company has told its shareholders in a trading statement.

The statement revealed that 99 per cent of its buy to let lending during the period was classed as specialist, focussing on the complex segment of the market.

There was particularly strong growth in lending against properties with an Energy Performance Certificate rating of between A and C. Lending on green buy to let products increased by 30.1 per cent during the period to £457.8 million.

Paragon’s buy to let pipeline stood at £811m at the period end, compared to £1.34 billion a year earlier, reflecting the disruption to application flows in the post Truss mini-budget period. 

The bank insists that recent application flows are stronger, with the pipeline up nearly 20 per cent.

Paragon Bank’s managing director of mortgages, Richard Rowntree, says: “We are delighted with our performance, delivering another half of financial and operational progress, against a backdrop of market volatility.

“We are experiencing strong application flows following the issues caused by the mini-budget, which reflects the strong underlying demand for buy-to-let investment by portfolio landlords.” 

Overall, the company increased underlying profits for the six months to March 31 by 22.2 per cent to £128.9m against the same period last year. Total new lending across Paragon’s divisions increased by 6.9 per cent during the first half to £1.59 billion, driving a 4.6 per cent year-on-year growth in the total loan book to £14.6 billion.